The fact that interest rates are rising is on many people’s minds. If you’re observing how low rates have remained for several years, though, this shouldn’t be a surprise.
While rates will inevitably rise, this won’t happen overnight. You shouldn’t expect to notice a substantial increase right away. Rates will gradually increase, giving you time to consider your financial strategies.
Because you may have a lot of equity due to rising property values, you may want to refinance and take cash out in certain circumstances. There may also be other compelling reasons to refinance now rather than later.
Convince Your Co-Borrower to Make You the Sole Borrower
Going into a partnership and buying a home with another borrower or getting married and buying a home together are two examples of how life never stays the same. People split up, but the house remains in their joint ownership.
Selling the property and splitting the earnings is one option. The other option is for one of the parties to buy out the other. This way, a cash-out may provide you with the funds you require to be the sole borrower of the loan.
Check Out New Options if Your Credit Has Improved
Even while interest rates may be rising, your credit score may have improved since you took out your house loan. In that scenario, it’s a good idea to weigh your options.
Contact a reputable lender and ask them to check your credit and tell you what kind of rate you might qualify for. You could be pleasantly surprised.
Get Rid of Your Mortgage Insurance
If you’re a first-time homebuyer, your first mortgage was most likely a government-backed FHA loan. These are excellent loans for people who are short on cash or have a bad credit history.
While their rates are competitive, there is still the additional cost of a mortgage insurance fee. You could save money if you get rid of the mortgage insurance fee by refinancing into a standard loan.
It’s worthwhile to evaluate what you qualify for and whether refinancing into a traditional loan is worthwhile.
Get an Investment Property with Your Refi Cash-Out
Buying a duplex, triplex, or fourplex as an investment property could be a wise financial move right now. Because rents are rising and renters are looking for a great location to live, this is the case.
In addition to helping you pay down your mortgage, reinvesting your equity in this way can help it increase.
Buy a Second Home with Your Refi Cash-Out
Some borrowers must have another residence for their work or schooling. This is usually to cut down on travel costs and other living expenses. Buying a second house could make your life easier and lower your overheads costs per month.
Your Mortgage Experts at Desert Springs Mortgage
You can even consider a home equity line of credit, which is a terrific financial tool that allows you to access your equity while keeping your current first mortgage.
Just remember that just because rates are rising on the news does not mean you can’t do anything with the equity in your house or see refinancing as an ideal decision in some cases.
If you’re looking for a mortgage company in Phoenix, Arizona, you should work with a reliable one like Desert Springs Mortgage. We’re a full-service mortgage brokerage known for our realtor partnerships and outstanding customer service. Contact us at (623) 432-1309 today!